1851

Analyzing any financial representations made in a&nbsp;<a href="https://1851franchise.com/understanding-the-franchise-disclosure-document-whats-inside-and-why-it-matters-2729366#stories">Franchise Disclosure Document</a> is a crucial part of the due diligence process for any prospective franchisee. Entrepreneurs looking to invest in the restaurant space, which has notoriously thin margins, should pay close attention to&nbsp;<a href="https://1851franchise.com/how-to-buy-a-franchise-exploring-item-19-of-the-fdd-2724955#stories">Item 19</a> and conduct additional due diligence, when possible, to get a better understanding of how much they might actually be able to make.<h2>The Baseline: Understanding Item 19</h2>Item 19 of the FDD is where a franchisor can legally make claims about the financial performance of its units. This can include detailed breakdowns of sales, expenses and profits, or it may just outline broad-stroke sales information, like median and average gross sales.These numbers are important, but when you only see data about revenue, additional legwork is required to begin to estimate profitability. In an industry with thin margins, high sales volumes don’t necessarily guarantee high profits, making this evaluation even more important.<h2>Estimating Profits When Only Revenue is Shown</h2>If a restaurant franchise only lists revenue in its FDD, you can still create a useful profit and loss estimate.Start with average revenue. Look at the figure (or figures) provided in Item 19 to come up with a starting point. If the brand segments this data by type of build-out, market or the age of the restaurant, hone in on the numbers that most closely represent what kind of restaurant you intend to open.Calculate the cost of goods sold. For restaurants, this includes all food and beverage costs. Industry-wide, a good COGS is&nbsp;<a href="https://www.sculpturehospitality.com/blog/how-to-calculate-cost-of-goods-sold-cogs-for-restaurants?utm_source=1851franchise.com&utm_medium=article&utm_campaign=calculate-restaurant-franchise-profit-2730476" target="_blank" rel="nofollow">between 28 and 35%</a>, but the exact percentage will depend on what type of restaurant you’re considering. Research benchmarks that will allow you to pinpoint a more specific number.Factor in labor costs. Labor is another significant expense for restaurant franchisees, with many restaurants&nbsp;<a href="https://pos.toasttab.com/blog/on-the-line/restaurant-labor-cost-percentage?srsltid=AfmBOoqZZFWWhSnrzx2533Uuu_hKdDUYEStC1i9vX0-696RVkt9IOiNW&utm_source=1851franchise.com&utm_medium=article&utm_campaign=calculate-restaurant-franchise-profit-2730476" target="_blank" rel="nofollow">aiming for labor to account for 30% or less</a> of gross sales.With these two numbers, you can estimate your prime cost. Ideally, the prime cost should be 60% or less of total sales.In addition to prime cost, franchisees should consider rent or occupancy costs (5 to 10% of revenue), royalties (4 to 8% of gross sales), marketing and advertising costs (1 to 4% of sales), and other operational costs like utilities, insurance and supplies (5 to 10% of sales). All of these costs will vary depending on your franchisor, business model and market; use these ranges as a guideline, and research carefully to hone in on the amounts that will realistically apply to your situation.<h2>Talk to Existing Franchisees</h2>While the FDD provides a wealth of information, existing franchisees are another invaluable resource. They can speak candidly about their personal experiences operating the business, and you can often get additional information from them that the franchisor legally cannot disclose.&nbsp;The FDD should include a list of franchisees with contact information; call several and ask questions.Individual owners may not feel comfortable sharing exact profit figures, but you can ask them about COGS, labor cost percentages and whether the revenue claims in the FDD seem realistic to them. This qualitative data can help you further hone your estimates and validate your financial projections or identify any potential red flags.By combining revenue data from the FDD with industry-standard benchmarks and insights from current owners, you can build a strong picture of a franchise’s potential profit margins. To take it a step further and begin to understand what these figures will mean for you, specifically, you must also consider the upfront costs of the investment.<h2>Where Franchise Costs and Financing Come In</h2>Determining a profit margin is a starting point, but applying this to costs and long-term returns is what will help you evaluate the strength of the opportunity. The franchise cost and how you choose to fund or finance things like the franchise fee, real estate, equipment and initial inventory should be a point of focus.Any loan payments should also be considered when building a well-rounded P&amp;L statement, and a higher initial franchise cost will require higher profit margins to achieve a good return on investment.Making an informed investment decision in the competitive restaurant industry requires a careful analysis of the franchise opportunity. The revenue figures in the FDD are just the beginning of the story; the true narrative of profitability is found when you project expenses, consult with other franchisees and analyze how upfront costs will impact your bottom line. With comprehensive due diligence, you can paint a clearer picture of the opportunity and equip yourself to make an investment decision that aligns with your long-term financial goals.For more information on restaurant franchise opportunities, check out these related stories on 1851:<ul><li><a href="https://1851franchise.com/why-restaurant-franchise-opportunities-are-booming-2728548#stories">Why Restaurant Franchise Opportunities Are Booming in 2025</a></li><li><a href="https://1851franchise.com/how-to-choose-the-best-restaurant-franchise-a-step-by-step-guide-2728463#stories">How To Choose the Best Restaurant Franchise: A Step-by-Step Guide</a></li><li><a href="https://1851franchise.com/how-to-secure-funding-for-a-restaurant-franchise-2728491#stories">How To Secure Funding for a Restaurant Franchise</a></li></ul>

design with arrow and magnifying glass over restaurant backdrop

How to Calculate Profit for Top Restaurant Franchises

1851 Franchise

Understanding revenue claims from the franchisor is just the first step. By researching other costs and considering your financing plan, you can more accurately estimate your return on investment.

How To Analyze the Profit Margins of Top Restaurant Franchises

calculate-restaurant-franchise-profit

TruBlue Home Service Ally

TruBlue’s Sean Fitzgerald on Aging in Place, Fall Prevention and Building a “Home Service Ally”

trublues-sean-fitzgerald-on-aging-in-place-fall-prevention-and-building-a-home-service-ally

Right at Home

Right at Home Targets Springfield, Westfield and Nearby Rural Communities for In-Home Care Growth

right-at-home-targets-springfield-westfield-and-nearby-rural-communities-for-in-home-care-growth

The Coffee Bean & Tea Leaf

Multi-Unit Franchising Conference, The Coffee Bean & Tea Leaf, Booth 1934

The Coffee Bean & Tea Leaf to Meet with Multi-Unit Candidates at MUFC 2026

multi-unit-franchising-conference-2026

Photo of Right at Home Simi Valley owner Sacha Butts

LA BUSINESS JOURNAL: Veteran Brings Right at Home to Simi Valley

la-business-journal-sacha-butts-right-at-home-simi-valley

Biscuit Belly Franchising

Biscuit Belly Targets Expansion in Houston as the Franchise Brunch Brand Seeks Texas Growth

houston-expansion-franchise-growth

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

The Top 10 Low-Cost Franchises With High ROI 

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Design with Precision Garage Door Service team members

RF Investment Partners and Burlington Capital Join Forces to Acquire Top Precision Garage Door Franchise

rf-burlington-precision-garage-door-acquisition

Private Equity Fuels Jiffy Lube’s Next Chapter as Monomoy Strikes $1.3 Billion Deal

private-equity-fuels-jiffy-lubes-next-chapter-as-monomoy-strikes-13-billion-deal

McDonald’s and Burger King Take the QSR Burger Wars to Social Media

mcdonalds-and-burger-king-take-the-qsr-burger-wars-to-social-media

Yum! Brands Pizza Hut Sale - 1851 Franchise

Possible Pizza Hut Sale Signals Shift in Yum! Brands’ Franchise Strategy

yum-brands-pizza-hut-sale

Restaurants Stand Out in 2025 Hiring as Consumers Look for Simple Treats

restaurants-stand-out-in-2025-hiring-as-consumers-look-for-simple-treats

How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

How Much Can Franchisees Make? A Guide for Prospective Franchise Owners

how-much-can-franchisees-make-a-guide-expert-tips

2026 Trop Fitness & Personal Training Franchises, 12 Lists of Christmas

From 24/7 gyms to high-tech training and boutique studios, these 20 brands’ innovation, accessible models and forward-thinking approaches will define the industry in 2026.

The 12 Top Franchise Lists of Christmas: Fitness and Personal Training Franchises for 2026

top-fitness-personal-training-franchises

1851 Franchise 12 Lists of Christmas, Beauty, Spa, Personal Care Franchises

From full-service luxury spas to high-tech medspas and specialized wellness studios, these unique franchise models cater to the specialized needs of modern beauty and wellness enthusiasts.

The 12 Top Franchise Lists of Christmas: Beauty, Spa and Personal Care Franchises for 2026

top-beauty-spa-franchise

The automotive industry continues to show resilience, and its growth is largely driven by steady demand for accessible, high-quality car care. The United States automotive service market was valued at&nbsp;<a href="https://www.mordorintelligence.com/industry-reports/united-states-automotive-service-market">over $199 billion this year</a>, and it’s expected to grow at a compound annual growth rate of 5.98% over the next five years, representing a projected value of over $266 billion by 2030.For entrepreneurs, this stability and the variety of opportunities available in the automotive space make it an attractive industry for investments.Here are the top 15 automotive brands to consider for 2026:<h2><a href="https://1851franchise.com/franchise-deep-dive-aamco-transmissions-and-total-car-care-franchise-costs-fees-profit-and-data-2726640">AAMCO Transmissions &amp; Total Car Care</a></h2><ul><li><a href="https://franchises.aamco.com/">Franchise Website&nbsp;</a></li><li><a href="https://1851franchise.com/growth-club/aamco-transmissions-franchise-opportunity">Growth Club Website</a></li><li>Investment Range:&nbsp;$236,800 - $361,200</li><li>Unit Count:&nbsp;530+&nbsp;&nbsp;</li></ul>AAMCO is a trusted name in the auto repair space, specializing in transmission work and other, more complex car care services. With over 60 years of experience, the brand is a true category-leader with a strong reputation among consumers.<h2><a href="https://1851franchise.com/franchise-deep-dive-mighty-auto-parts-franchise-costs-fees-profit-and-data-2724565">Mighty Auto Parts</a></h2><ul><li><a href="https://www.mightyfranchise.com/">Franchise Website&nbsp;</a></li><li><a href="https://1851franchise.com/growth-club/mighty-auto-parts-franchise">Growth Club Website</a></li><li>Investment Range:&nbsp;$247,000 - $595,600</li><li>Unit Count:&nbsp;95&nbsp;&nbsp;</li></ul>Mighty Auto Parts focuses on the distribution of auto parts, lubricants and shop supplies for automotive service providers. With an efficient parts system and rapid order fulfillment capabilities, franchisees can run an efficient, high-volume business.<h2><a href="https://1851franchise.com/milexmr-transmission-franchise-costs-fees-profit-and-data-for-2025-2728544">Milex/Mr. Transmission</a></h2><ul><li><a href="https://moranfamilyofbrands.com/milex-auto-care-franchise">Milex Franchise Website</a></li><li><a href="https://moranfamilyofbrands.com/mr-transmission">Mr. Transmission Franchise Website&nbsp;</a></li><li><a href="https://1851franchise.com/growth-club/milex-mr-transmission-franchise">Growth Club Website</a></li><li>Investment Range:&nbsp;$267,300 - $362,700</li><li>Unit Count:&nbsp;111&nbsp;&nbsp;</li></ul>Milex and Mr. Transmission are part of the larger&nbsp;<a href="https://moranfamilyofbrands.com/">Moran Family of Brands</a>. With the option to develop individual Milex or Mr. Transmission businesses as well as co-branded Milex&nbsp;and Mr. Transmission locations, franchisees have flexibility in their investment and are able to tap into multiple revenue streams under one roof.<h2><a href="https://1851franchise.com/turbo-tint-franchise-costs-fees-profit-and-data-for-2025-2728451">Turbo Tint</a></h2><ul><li><a href="https://franchise.turbotint.com/">Franchise Website&nbsp;</a></li><li><a href="https://1851franchise.com/growth-club/turbo-tint-automotive-franchise">Growth Club Website</a></li><li>Investment Range:&nbsp;$295,510 - $415,400</li><li>Unit Count:&nbsp;20&nbsp;&nbsp;</li></ul>Turbo Tint offers window film services, a high-margin and relatively niche service. With efficient operations thanks to installs that can typically be completed in about an hour, Turbo Tint franchisees benefit from a high-volume, relatively low-complexity business model.<h2>HardTop Hotel</h2><ul><li><a href="https://hardtophotelfranchise.com/">Franchise Website&nbsp;</a></li><li><a href="https://1851franchise.com/growth-club/hardtop-hotel-franchise-opportunities">Growth Club Website</a></li><li>Investment Range:&nbsp;$120,200 - $193,460</li><li>Unit Count:&nbsp;5&nbsp;&nbsp;</li></ul>HardTop Hotel is a specialized concept catering to owners of hard- and soft-top vehicles, offering installation services, hard- and soft-tops for rent and sale, and storage solutions for those who like to remove the tops of their vehicles for the warmer seasons. In addition to the revenue created by sales, rentals and installation services, franchisees benefit from the longer-term stability of the storage model.<h2>Christian Brothers Automotive</h2><ul><li><a href="https://www.christianbrothersfranchise.com/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$550,250 - $680,400</li><li>Unit Count:&nbsp;300+&nbsp;&nbsp;</li></ul>Christian Brothers Automotive is a full-service repair franchise that focuses on great customer service. With a values-driven brand, Christian Brothers Automotive franchisees have an opportunity to build a more meaningful, community-centric business in an industry that is often viewed by customers as highly commodity-driven.<h2><a href="https://1851franchise.com/franchise-deep-dive-grease-monkeys-franchise-costs-fees-profit-and-data-2721791">Grease Monkey</a></h2><ul><li><a href="https://greasemonkeyfranchise.com/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$291,320 - $1,972,033</li><li>Unit Count:&nbsp;370+&nbsp;&nbsp;</li></ul>Grease Monkey is a quick-service auto franchise known primarily for its efficient oil changes and preventative maintenance services. By focusing on ease and efficiency in an industry that can sometimes be unpredictable or deliver subpar customer service, Grease Monkey franchisees can become the trusted resource for regular car care in their communities.<h2><a href="https://1851franchise.com/franchise-deep-dive-jiffy-lube-franchise-costs-fees-profit-and-data-2720873">Jiffy Lube</a></h2><ul><li><a href="https://franchise.jiffylube.com/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$232,000 - $520,000 (excluding real estate costs)</li><li>Unit Count:&nbsp;2,000+&nbsp;&nbsp;</li></ul>Jiffy Lube is one of the largest quick-service oil change and maintenance brands. The business model is designed for volume, and it encourages repeat visits from individual customers, creating strength and stability for franchisees.<h2><a href="https://1851franchise.com/franchise-deep-dive-maacos-franchise-costs-fees-profit-and-data-2724767">Maaco</a></h2><ul><li><a href="https://maacofranchise.com/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$196,000 -&nbsp; $3,994,000</li><li>Unit Count:&nbsp;360+&nbsp;&nbsp;</li></ul>Maaco is an automotive franchise providing painting, cosmetic services and collision repair. Because Maaco is a body shop, as opposed to a standard maintenance brand or express oil change establishment, it leverages more specialized services and can stand out in the auto industry at large.&nbsp;<h2>Midas</h2><ul><li><a href="https://www.midasfranchise.com/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$106,650 - $1,132,640 (including both new and conversion opportunities)</li><li>Unit Count:&nbsp;975 in the U.S., 2,000+ worldwide&nbsp;&nbsp;</li></ul>Midas is a full-service auto repair and maintenance brand, offering both new-unit and business conversion options. With a few key service areas, including brakes, exhaust, tires, oil, steering, suspension and wheels, Midas can market multiple services to a single customer base, positioning franchisees to capture additional revenue.<h2>No-H2O</h2><ul><li><a href="https://noh2o.com/car-wash-franchise/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$134,550 - $162,500</li><li>Unit Count:&nbsp;30&nbsp;&nbsp;</li></ul>No-H2O is a waterless, mobile car wash and detailing franchise. By excluding the use of water, No-H2O is more mobile and flexible than traditional wash and detail concepts, and it appeals to the growing eco-conscious crowd.<h2><a href="https://1851franchise.com/franchise-deep-dive-take-5-oil-changes-franchise-costs-fees-profit-and-data-2723018">Take 5 Oil Change</a></h2><ul><li><a href="https://take5franchise.com/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$287,145 - $2,053,642 (including both new and conversion opportunities)</li><li>Unit Count:&nbsp;1,100+&nbsp;&nbsp;</li></ul>Take 5 Oil Change is a convenience-driven oil change franchise that allows customers to stay in their cars for the duration of the service and targets a 10-minute maintenance time. This makes throughput more straightforward for franchisees and their teams, and it appeals to the busy customers of today.<h2><a href="https://1851franchise.com/franchise-deep-dive-tint-world-franchise-costs-fees-profit-and-data-2723226#stories">Tint World</a></h2><ul><li><a href="https://www.tintworld.com/franchise-opportunities/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$239,950 - $449,950</li><li>Unit Count:&nbsp;135+&nbsp;&nbsp;</li></ul>Tint World is a specialized vehicle and window film franchise offering tinting, detailing and other “automotive styling” services. By combining frequently sought services, like window tinting, with more specialized ones, like audio, lighting and other accessories, Tint World franchisees are positioned as the one-stop shop for vehicle enhancement.<h2>Tommy’s Express Car Wash</h2><ul><li><a href="https://tommys-express.com/franchise/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$4,976,759 - $8,522,378</li><li>Unit Count:&nbsp;215+&nbsp;&nbsp;</li></ul>Tommy’s Express Car Wash operates high-volume, express tunnel car-wash facilities that focus on speed without sacrificing quality. With precise equipment that automates much of the wash process, franchisees can keep labor costs low and scale more efficiently.<h2>Valvoline Instant Oil Change</h2><ul><li><a href="https://www.viocfranchise.com/">Franchise Website&nbsp;</a></li><li>Investment Range:&nbsp;$192,375 - $3,483,550</li><li>Unit Count:&nbsp;1,875&nbsp;&nbsp;</li></ul>Valvoline is a prominent national brand offering oil changes and preventative maintenance services. The brand boasts 18 consecutive years of same-store sales growth, and though it’s a nationally recognized brand, Valvoline notes there are still prime territories available, offering a unique combination of brand strength and recognition and future growth potential.From national giants like Jiffy Lube and Valvoline to specialty brands like Turbo Tint and HardTop Hotel, the automotive franchise space offers a diverse range of opportunities for all kinds of investors. Whether you’re drawn to the stability of recurring maintenance services or the innovation of tech-driven, specialized brands, these top franchises have the power necessary to drive your dreams forward.For more information on automotive franchise opportunities, check out these related resources from 1851 Franchise:<ul><li><a href="https://www.youtube.com/watch?v=Tvx0H511MtQ">Why Buy an Automotive Franchise? Drive Your Business to Success</a></li><li><a href="https://1851franchise.com/automotive-franchises-are-driving-into-the-future-with-tech-and-trust-2730075">Automotive Franchises Are Driving Into the Future With Tech and Trust</a></li><li><a href="https://1851franchise.com/growth-club/industry/best-automotive-franchise-opportunities">How To Start an Automotive Franchise Business</a></li></ul>

1851 Franchise 12 Lists of Christmas - Top Automotive Franchises

From express oil change and car wash concepts to specialized “automotive styling” brands, these 15 auto franchises will help you drive your future forward.

The 12 Top Franchise Lists of Christmas: Automotive Franchises for 2026

top-automotive-franchise-opportunities

<a href="https://hardeesfranchising.com/">Hardee’s</a>, a 65-year-old burger chain best known for its Thickburgers and breakfast biscuits, is facing a fast-moving round of closures driven by a franchise dispute rather than a bankruptcy filing.&nbsp;<a href="https://www.inc.com/ava-levinson/hardees-shutting-dozens-restaurants/91282586">Inc. recently reported that</a> 77&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-hardees-franchise-costs-fees-profit-and-data-2721286">Hardee’s</a> restaurants are expected to close within two weeks as one of the brand’s largest franchisees exits the system.&nbsp;According to the report, Hardee’s is suing&nbsp;<a href="https://www.arcburger.com/">ARC Burger</a> — a franchise operator owned by&nbsp;<a href="https://www.highbluffcap.com/">High Bluff Capital Partners</a> — alleging the company fell behind on required payments and other contract obligations. Twenty-eight locations had already gone dark as of late December, with remaining sites scheduled to shutter across eight states: Alabama, Florida, Georgia, Illinois, Missouri, Montana, South Carolina and Wyoming.&nbsp;At the center of the complaint is the franchising “stack” of ongoing fees and pass-through costs that keep a system running. ARC Burger allegedly owes more than $6.5 million, including royalties, advertising fund contributions, technology and training fees, rent and taxes, and that payments stopped in December 2024. Hardee’s also argued in the lawsuit that the franchisee’s cash flow was not being used to bring accounts current.&nbsp;Hardee’s, for its part, is framing the shutdowns as a contractual enforcement issue, not a brand-wide retrenchment. “These closures are a result of ARC Burger’s failure to cure its defaults under its franchise agreements, despite solid sales,” a Hardee’s spokesperson said.&nbsp;The situation highlights a familiar franchising pressure point: unit economics. Inc. reported that Hardee’s operates more than 1,800 U.S. restaurants and that average annual sales per location are less than $1.2 million, well below averages cited for&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-wendys-franchise-costs-fees-profit-and-data-2722520">Wendy’s</a> and&nbsp;<a href="https://1851franchise.com/how-much-does-it-cost-to-buy-a-mcdonalds-franchise-2724654#stories">McDonald’s</a>. Lower volumes can leave franchisees with less room to absorb higher labor, food and occupancy costs while staying current on fees.&nbsp;Hardee’s said it is working to limit fallout for workers and communities and is looking for ways to reopen closed restaurants. For franchising, the next chapter will likely involve finding replacement operators, transferring sites and rebuilding compliance — a reminder that franchise growth depends as much on franchisee solvency and execution as it does on consumer demand.Read the original article&nbsp;<a href="https://www.inc.com/ava-levinson/hardees-shutting-dozens-restaurants/91282586">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="https://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Hardee's Franchise - ARC Burger Lawsuit - 1851 Franchise

The closures stem from alleged unpaid royalties and missed franchise obligations by a major operator, not a broader chainwide collapse for the Hardee’s system.

Hardee’s Lawsuit Targets Franchisee as 77 Restaurants Prepare to Shut Down

hardees-franchise-closures-arc-burger-lawsuit

Ellianos Coffee Franchise Costs, Fees, Profit and Data for 2025

Franchise Opportunity Deep Dive: A drive-thru specialty coffee franchise focused on speed, quality and Southern hospitality.

ellianos-coffee-franchise-costs-fees-profit-and-data

Franchise Opportunity Deep Dive: A fast-casual restaurant brand serving made-from-scratch sandwiches, salads, soups and pizzas rooted in Southern hospitality.


How To Analyze the Profit Margins of Top Restaurant Franchises

MORE STORIES LIKE THIS